Which must be accounted for because replenishment of stock, Supply Chain Management

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Which must be accounted for because replenishment of stock

Problem

Suppose the EOQ solution for a product ordered for a supplier is Q*=200. Suppose Maty wants to make it in-house, which changes the nature of the problem: Now there is a constant production rate, P, which must be accounted for, because replenishment of stock is no longer instantaneous. Assuming all other parameters stay the same. In the case where the in-house production is idle for ¼ of the time, what is the new optimal order quantity?

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Supply Chain Management: Which must be accounted for because replenishment of stock

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Supply Chain Management: Which must be accounted for because replenishment of stock

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